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10 March 2008 International US-India: arms sales

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How about snacks...while the N-deal cooks
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With the Indo-US civilian nuclear deal in a sling just like visiting US defence secretary Robert Gates' injured shoulder, the Bush administration's focus has shifted to the business of doing business. And India seems willing. The political route to herald a special relationship has clearly proved tortuous, so the calculation is, the military road paved with defence contracts might be a straighter one for the moment. Gates' high-level sales pitch was aimed at ensuring a level playing field for Washington, especially when India decides on the largest-ever contract for 126 aircraft—worth $10 billion—after the March 3 deadline for bids.

Bubbling just below the surface is the guilt factor. Since India's domestic politics is currently responsible for delaying the nuclear deal, there is growing talk in Washington of the "enormous political capital" President George Bush spent pushing the agreement through his own recalcitrant legislative system. Only to have it languish in the bylanes of Delhi's coalition politics. It would be nice if India were to make a gesture, which could be seen as a good return on Bush's investment.

Signals from New Delhi too are on the same frequency, sources say. Indian interlocutors have literally invited the Americans to sell "some planes" to keep things smooth on the rising graph of bilateral relations. It suits the Indian armed forces too, who want to diversify vendors and balance the Russian dominance. To further soothe frayed nerves, India assured Gates that the long-hanging logistics agreement, and a communications agreement which allows transmission of classified information, would be signed before the year ends. The latter would prevent a situation like the one during the 2004 tsunami when Indian and US ships "didn't know how to talk to each other".

Gates said that while the nuclear agreement was "very important", he was in India "to explore what opportunities there are to further expand our defence relations". He also said US defence sales would be unconditional—meaning no demands vis-a-vis Iran or Myanmar. India has already broken the "psychological barrier" against American equipment, signing an agreement on January 30 for six C-130J transport planes for $1.1 billion.

As long as military cooperation and sales continue, the relationship grows. If the US wins the mega deal of 126 aircraft, it means 20 years of cooperation, an official commented. Washington also has its eyes on upcoming deals, including helicopters for all three Indian defence forces. Delhi is expected to spend $40 billion on defence purchases in the next five years, and a good slice of that pie could be very satisfying. The Pentagon's willingness to sell more is also partly driven by a desire to counter China's rise. A US analyst said Washington "wants India more than India wants the US and Indian leaders are playing smart".

But the Americans are also openly disappointed by the slow progress on the nuclear agreement and talk of a "trust deficit" developing. "We really bent over backwards for this one and now the air is seeping out of the balloon," said an official. The Indians counter that it took the Bush administration 18 months to get the Hyde Act passed. "It was passed in the last minute of the last day of the last session of 2006," a senior official commented.

The fact that Sonia Gandhi refused to meet high-level US visitors—from lead negotiator Nicholas Burns last year to senators earlier this month and Gates last week—has added insult to injury. While commercial relations will grow, that "extra" punch might be missing.

The strains are felt but big transactions can also sometimes transform relations. The impressions Gates took away are important because the Pentagon has discretionary powers to allow or veto any cutting-edge equipment India might want to buy. The areas of discretion can shrink if the feeling grows that India is a serious partner.
Next Story : Aparna Sen
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